No matter which way you look at it, it’s been a record-breaking year for the Sydney property market.
Sydney dwelling prices rose by a staggering 25.8% over the year to 30 November, according to CoreLogic, to reach a median house price of $1,360,543 and a median unit price of $837,169.
We certainly experienced it here in the inner city and inner west, with the median house prices in Redfern and Erskineville jumping by 31.4% and 19.6% respectively since November 2020.
Let’s take a look at this year’s property market trends and find out what the market is doing now, as well as what we can expect for the new year.
Strong buyer demand, low stock levels
The Sydney property market was characterised this year by high buyer demand and very low stock levels. According to data from SQM Research, Sydney property listings hit a four-year low in August, with only 22,387 homes listed for sale.
With plenty of genuine buyers in the market, competition for available homes was strong. Auction clearance rates peaked at 81.4% in March, according to Domain, the highest result in more than six years, giving a good indication of just how strong buyer demand has been this year.
While auctions have been hotly contested, this year has also seen the rise of the off-market sale. We’ve conducted over 20 off-market sales this year – four times more than any previous year. Off-market sales allow vendors to test interest in their property without the pressure of an auction campaign, which suited many sellers during this pandemic year. Many vendors were also accepting offers on their properties prior to the auction.
Buyers seeking space
This year, thanks to lockdown, we all spent more time at home than ever, and one of the biggest property trends to emerge from this experience has been the desire for larger homes. As people continue to work from home, buyers are increasingly looking for properties offering more indoor and outdoor living spaces. Record numbers of people seeking more space and a lifestyle change have chosen to move from Australia’s capital cities to regional areas, according to the ABS, and we’re seeing vendors selling up in the inner city and inner west as they plan their own sea or tree change.
This trend for more space can be seen in the Sydney property market, too, as the demand for houses outstrips that for apartments. Sydney has the widest gap between house and unit prices of anywhere in the nation, according to CoreLogic. A house here costs, on average, $523,000 more than a unit. However, that may well change before too long. Tim Lawless of CoreLogic predicts that demand for apartments will gradually return, for the simple fact that they are more affordable than houses.
What is the Sydney property market doing now?
The Sydney property market might not feel quite as frenzied as it did earlier in the year, but it continues to grow, and housing values here rose another 0.9% in November. As Tim Lawless from CoreLogic points out, “Even though the market has slowed, the rate is still well above average. If you’re looking at the marketplace in Sydney, that 1 per cent is still nearly a $10,000 increase in a month.”
Much to buyers’ relief, the stock has recently returned to almost normal levels, with Sydney listings sitting just 2.6% below the five-year average, according to CoreLogic. Auctions are back in a big way, too, with 1,352 Sydney homes going under the hammer in the week ending 27 November. This makes it Sydney’s second busiest auction week on record and the busiest in seven years. Meanwhile, with so much more stock on the market, auction clearance rates have softened a little, with 71% of properties sold on Saturday 27 November, according to Domain, compared to 79% at the same time last year.
What can we expect next year?
Looking ahead to 2022, experts and economists are predicting Sydney property prices will continue to rise, albeit at a slower rate than they have in 2021. The re-opening of international borders, and the return of international investors, is expected to add fuel to the market. Interest rate increases are likely to be the handbrake that reverses the growth trend, but the RBA has said recently that a rate increase is not likely to occur until 2023.
If you’re looking to buy, there’s still time to secure a property before Christmas. And with the experts predicting that Sydney property prices will continue to rise in 2022, now is a good time to take the plunge. For sellers, meanwhile, it’s the perfect time to be preparing your property for sale in the new year.
Whether you’re thinking about buying or selling in Sydney’s inner-city or inner west, my team and I are here to help. Get in touch today.